Google is Evading Taxes by Running Illegal Sales Activities in Pakistan

Google’s sales representatives are reportedly making physical one-to-one meetings with Pakistani brands/advertisers to book media for Google’s online properties in Pakistan including YouTube, we have checked with multiple sources.

For the purpose, Google has on-boarded a dedicated sales team that’s responsible for ad sales from Pakistan, said a source in a telecom company who has met Google reps on multiple occasions in Islamabad during past few months.

“They offer us special rates and exclusive inventory which we otherwise can not buy”, told us another source who is a marketing executive and has bought media from a Google rep directly at least once.

With this, Google is effectively running physical-business activities in Pakistan with a specialized sales team, country head and dedicated PR manager for the country.

“Yes, Google has pitched us directly through reps, several times”, a Pakistani business executive

Google, on the other hand, maintains that it is not liable for any taxes since it doesn’t operate in Pakistan through any employee or an office.

When we asked Zeffri Yusof, who manages PR for Google in Pakistan, why Google isn’t paying taxes in Pakistan despite running on-ground business activity, he said that Google does not have any employees in Pakistan.

Mr. Zeffri confirmed that Google has an external country consultant. “But he is not a Google employee”, he explained.

When we Asked Zeffri about Google Week that was organized by Google reps at Unilever to pitch with exclusive advertising deals, he said that Google employees may, from time to time, conduct outreach activities to Pakistani audiences (read businesses) that revolve around market education of Google products and platforms.

Not to mention, Google has organized similar workshops in various companies throughout the country to gain traction and to win direct business deals.

A legal expert, while speaking with ProPakistani, said that Google has worked under the cover of consultants in Pakistan for over a decade now. “These consultants do all kind of business and promotion activities for Google in the country”, he said.

Federal Board of Revenue and Punjab Revenue Authority have specifically tired in past to bring Google in the tax net, but Google denied having any on-ground business activity in Pakistan to escape from taxing liabilities to Pakistan.

With on-ground sales pitches through reps, Google is liable to taxes in Pakistan: FBR

However, with sales pitches — and in fact successful business deals with Pakistani brands — through on-ground personnel, Google is illegally evading taxes in Pakistan.

An FBR official, while speaking with ProPakistani, said that if they are pitching clients in Pakistan through sales reps then they must pay taxes according to Pakistani laws.

He said that the Board will investigate the matter and may also impose a penalty on Google if they are found to be involved in tax evasion.

Punjab Revenue Authority, on the other hand, has said that it can approach concerned authorities to get Google services banned in Pakistan if it continues such sales activities without paying taxes.

It must be noted that tax evasion is just one thing that Google gets away with by not registering an office. There are many other business, commercial and legal obligations that Google evades by not having an office in the country.

The company makes millions through services and advertisements from Pakistan and gives back nothing, neither in taxes, nor in FDI or in any other form.

No, uploading a Doodle on independence day isn’t enough.

Tech and telecom reporter with over 15 years of experience, he works as founder of ProPakistani.PK

  • You nailed it with “No, uploading a Doodle on independence day isn’t enough.”

      • Yes. They do under table deal with Google so called representative in Islamabad.
        Some guy name badar was previously working for Google and made deal with many companies like PTCL which is already in the ERA of curroption.

    • And yet, propakistani makes money from Google by way of ads, so this site certainly profits from Google’s attitude towards Pakistani FBR.

  • Yahan tou mulk ka wazir e azam tax chor hai tou google se kaisa shikwa? Moujain karney dou unhain bhi.
    “koi aur nahi bas, shairrrrrrrrrrrrrrrr! ”

  • Its really disgusting by google, it should be banned for all commercial activities in Pakistan. Every time we see ads on google, but its really very unethical if its not paying taxes in our country.

    • Bari hairan kun hai yeh baat, google is also the tax thief. All brands should ban google in Pakistan.

  • Google should definitely be penalized for these activities, I listened previously that they have refused FBR for taxes saying they do not work in Pakistan and have no office/staff in Pakistan.

    • Brother they are FULL active here and our corporates corrupt officers making direct deal with them.
      Heard PTCL did that several times.

  • We should not expect FBR to do magics, companies in pakistan should co-operate with FBR in this regard.

  • I think the law of the land has to be changed… For companies using any asset of the country they should be liable to tax. If a company has a target audience in Pakistan then based on the no. of people that it targets it should pay tax (the tax should be from the company and not the service) Pakistan has more people so that is an asset….. The Govt will slowing be loosing a lot of tax, if it does not do that…….and it will cause lot of job cuts and some local companies will close down… one way of thinking !

  • I think Google is a bit clever than the Govt. of Pakistan. I have a small request from my side which is that Govt. of Pakistan should try not to impose any TAX on IT sector as when Pakistan economy was at it’s worst then IT sector has pushed up the economy (in 2011) with a figure of 68% or more in revenues and business.

    • Its true, but that was different time, IT has grown well now and Pakistan needs the support of tax from all individuals of Pakistan and every company. Its the liability and duty of every pakistani to contribute to Pakistan by paying its all due and liable taxes. The company like google should definitely not do such mischievous activities.

      • Pakistan should make its privatization policy as all the current money collected from Taxes are going to support corporation that should pay the Govt. and they are instead taking on yearly basis from the Govt. of Pakistan. This is not the first time, they have been taking since 30+ years.

  • If it was the case that google is directly working in Pakistan, its a big nonsense that it is not paying taxes, shame for google and for companies directly dealing with google. Atleast our pakistani companies should be responsible for this nonsense by google.

    • I will second mubashir ahmed, both google and Pakistan companies in this case are doing illegal activities. FBR should investigate both of them and should penalize the involved parties.

    • But by the same logic, every company that does business with Pakistanis is also not paying taxes. Companies like Amazon, Apple, hosting providers like dreamhost, blog providers like wordpress (dot com), etc etc.

      What is your plan to convince 100% of these companies to pay taxes to FBR?

  • Just grow up guys, google is offshore organization, they do not need to pay taxes here in Pakistan. Even if some deals are going on, the Pakistanis who earn from those are liable for taxes. Half of world have already blocked us from using their services and the ones which give us services, we are hell bent on blocking them.

    • That’s such a childish response coming from someone who began their comment with “Just grow up guys”. You need a lesson in Business 101. Google are not providing their services for free. And right now, they’re taking it all without giving anything back.

      • Google isn’t liable to pay Taxes in Pakistan. There operating as an offshore company registered in Ireland. They pay Irish taxes. They don’t have any offices or official staff. Most of their non-US revenue is channeled to Google Irish Holdings registered in Ireland and based in Bermuda. They’re not breaking any laws

        • What are you even talking about? Google is registered, and paying taxes in every country they operate. US, UK, Canada, Australia you name it. Oh yes, even India. And this isn’t the first time they’ve tried evading taxes. Just Google how many times they’ve had to pay fines to governments for being sneaky.

      • foreign non-registered companies without permanent domicile are exempt from tax. Operating through consultants is not illegal.

  • Uber isnt doing any different. They are operating with impunity without registering any driver let alone the company staff. We are taken for granted, and we deserve it.

  • Good for them. They should take advantage of the backwardness of this country’s population. People don’t realize that you can get a lot of work done without having any office at all. It seems they have never heard of telecommuting.

    • Goverment apply taxes on revenue not on office, by law its must to register a company in the country to do any business of a medium or large scale, even if you start it from home.

      • So If I purchase a t-shirt from teespring site, teespring has to pay taxes to FBR? It is much much simpler for lots of small companies to simply stop doing business with Pakistan.

        Conversely, if your run an online business from Pakistan, do you pay taxes to Euripean Union for money you make from their citizens? It goes both ways, they pay our taxes, you have to pay there taxes too

  • Pakistan Goverment should realize and should put strong nails to get them in tax network. Millions of dollars are moving out of pakistan, then how they are not liable for taxes, Pakistan should try to recover taxes on all the business that have been made by google directly from pakistan. If google do not pay so, the taxes should be recovered from the brands dealing directly with google.

  • Its shameful for brands, shameless for google, deceiving and damagin pakistan. Hello google, this is our pakistan and we shall let you do such frauds here, All Pakistanis should ban such brands and google services if this continues.

    • foreign non-registered companies without permanent domicile are exempt from tax. Operating through consultants is not illegal.

  • put tax on OTA services if you want google to pay taxes. already gov’t is jacking up money from telecom consumers be it cell usage or broadband then why not OTA & stuff like that….

  • I think it does not make any sense that google is making lot of money from pakistan and not paying taxes. Since they do not have any physical office here in pakistan. if you impose tax on google. Than what about Millions of Freelancers and companies in pakistan dealing directly with US companies selling freelance service as a freelancer and a company?

    Do we pay tax to US government when we sell our service to Fiverr, Upwork or direct projects??

    • Owais,google is not doing freelancing and not selling services, its selling media of millions of dollars, it should definitely pay taxes, its one of the biggest companies of the world.

      • After all Google is Providing Service. Selling media is also a service. The rule is for every one. Weather you are a small company, Medium size company or large/corporate company. The size of company does not matters if you apply rule of law. You have to follow the rule weather you are a freelancer Making $300 Per Month or You are big company Making Millions.

  • Google should not do so. Actually american companies take pakistan for granted, any international company should never be allowed to do any business without taxes, when FBR is on the direction to correct the tax collection process in pakistan.

  • Aamir bhai, Actually the mistake is of pakistan companies who are direct doing business with google. I they had refused it how google could have done any business , There is need to put control on these companies as well who don’t care for pakistan benefits while doing business in our country.

  • Dear Amir, please tell us know which local companies are doing such business with international companies like google, so that we can raise voice against those companies to stop such corruption in Pakistan. Its the better time to take action, if it prolonged, we may not stop this.

  • It seems like Aamir Atta’s Ad revenue is down from Adsense and he is really angry at Google?

  • PTCL also given business directly to google and other corporates also. FBR should ask them also.

    • No Foreign company pays tax in Pakistan so we should stop dealing with the outside world?

  • Can anyone Ask this Google fraud about this tax Evading? Hello FBR wake up. Koi sharam hoti hay koi jata hoti hay.

  • why u think anyone will even think of presence in our country? bad crippling infrastructure, corrupt govt, highest amount of taxes in 3rd world on mobile and electronics sector.

  • It is not illegal to operate in a country via contractors or third-party partners…the contractors/third-party partners are liable for taxes as per the local tax laws that apply to them, on the revenue / fee cut they get, but the main company itself is not liable for taxes in Pakistan until they register the company locally…that’s no big news…half the world operates like that…it’s like saying if someone sells a BMW in Pakistan on behalf of BMW, but BMW doesn’t have an office in Pakistan, they should pay taxes on the revenue. No they should not and they do not, but the intermediary has to pay the tax on his fee/cut.

    • what if pakistani company directly get rates and proposal from google and make a deal with them in Islamabad?

      • Its the same Google is still exempt from tax. foreign non-registered companies without permanent domicile are exempt from tax.

        • but they have employee here who visits offices and offer proposals and rates and making direct deal, mean company pay them directly.

          • You pay directly to every exporter in a foreign country but they don;t pay taxes and no these are not employees but consultants

            • How is this possible, google is just using the term consutants for its employees, the consultants in pakistan will also be getting salaries from google, and neither consultants nor google will be paying taxes on their salaries as well. If they have to use the Pk market, ethically they should pay the due taxes in our country, why only we are paying it for them. We all should think and talk sincerely for Pakistan.

  • Any one who says that Google is evading tax should consider this. you want them to pay so the so called the rulers of Pakistan can and high govt officials should carry on living their lavish life styles. Keep on sucking every inch of blood left in the people. And companies like Google should be fined so that they can stop their services for our country and then leave people out who are earning some bread and butter for their family. I am not a Google employee, but just an ordinary Pakistani who is fed up of the whole system that we have here. Do you guys see any decent development in the quality of life of an ordinary Pakistani except you can definately find all what is needed for these corrupt officials to make there living luxorious. They will build roads that are mostly used on their routes but never provide a decent meal to the ordinary. If younare still convinced that offshore companies should pay taxes then lets ban everything out of Pakistan and start living in dark ages.

  • Guys i’am making a chat system with pure php when i’am done with it will start it
    if you guys are waiting Thumbs up for it and replay
    Regard From pakistan

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